Legislature(1997 - 1998)
03/06/1997 03:42 PM Senate STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE March 6, 1997 3:42 p.m. MEMBERS PRESENT Senator Lyda Green, Chairman Senator Jerry Ward, Vice-chair Senator Jerry Mackie Senator Mike Miller MEMBERS ABSENT Senator Jim Duncan COMMITTEE CALENDAR SENATE BILL NO. 54 "An Act relating to eligibility for the longevity bonus; and providing for an effective date." HEARD AND HELD SENATE JOINT RESOLUTION NO. 4 Relating to an amendment to the Constitution of the United States setting out the authority of the United States Congress and of state legislatures to enact laws relating to limits on election campaign expenditures. PASSED SJR 4 OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION SB 54 - No previous Senate committee action. SJR 4 - No previous Senate committee action. WITNESS REGISTER Senator Dave Donley Alaska State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Sponsor of SJR 4 Alison Elgee Deputy Commissioner Department of Administration P.O. Box 110200 Juneau, AK 99811-0200 POSITION STATEMENT: Testified in support of SB 54. ACTION NARRATIVE TAPE 97-8, SIDE A Number 00 CHAIRMAN LYDA GREEN called the Senate State Affairs Committee meeting to order at 3:42 p.m. Senators Miller, Ward and Green were present. SJR 4 was the first order of business before the committee. SJR 4 FED CONST AM RE: CAMPAIGN EXPENDITURES SENATOR DAVE DONLEY , sponsor of the measure, explained SJR 4 proposes to Congress a U.S. constitutional amendment to empower Congress to set reasonable campaign spending limits for election to federal offices, and to allow states to set reasonable limits for campaign expenditures for state and local offices. SJR 4 parallels identical resolutions currently before Congress and addresses the problem raised with the U.S. Supreme Court decision of Buckley v. Valeo which prohibits campaign spending limits because the Court has equated campaign spending with the right to free speech. There is a national movement to give government the authority, under the Constitution, to limit campaign spending. Number 035 CHAIRMAN GREEN noted there is general concern about what a Constitutional Convention could encompass. She added states tend to withdraw requests for a Constitutional Convention when the possibility actually arises. SENATOR DONLEY responded every time this country has come close to holding a Constitutional Convention one of two things has happened: a state withdraws its request, or Congress has taken action to amend the Constitution on its own. During the last election, the voters of Alaska approved, and in fact mandated, that the State use this identical procedure in asking for a constitutional amendment for term limits. Most people do not want a Constitutional Convention but a serious change in the federal system over the last two centuries has occurred. When the U.S. Constitution was originally drafted, states had a lot of very important powers they no longer have to encourage changes on the federal level, and changes to the federal Constitution. One example of a federal check and balance procedure between the federal government and the states that no longer exists is that State legislatures originally chose their senators. If a state wanted a U.S. constitutional amendment, legislators could instruct their senators to vote that way. States no longer have that authority. Resolutions are virtually the only remaining power that rests with the states to compel action by the federal government. If the states fail to use this power occasionally, they have no remaining powers in the federal system. It is clear no one wants a Constitutional Convention, but SJR 4 sends a very serious message to Congress and will spur it to action. He stated he would be one of the first to advocate that if, 25 to 30 other states made the same request, Alaska withdraw its request, if Congress does not act independently. SENATOR WARD moved SJR 4 out of committee with a zero fiscal note and individual recommendations. He noted he plans to speak to Judiciary Committee members for assurance that a Constitutional Convention will not take place as a result of SJR 4. There being no objection, SJR 4 moved out of committee with individual recommendations. SB 54 MAXIMUM INCOME FOR LONGEVITY BONUS ALISON ELGEE , Deputy Commissioner of the Department of Administration (DOA), gave the following overview. SB 54 is comparable to legislation introduced by the Governor during the last legislature and sets an income cap for eligibility for receipt of the longevity bonus payment: $60,000 for a single individual, and $80,000 for a married couple living together. While trying to reduce state expenditures, the Governor is trying to determine where those reductions will have the least impact and believes longevity bonus payments for people at those income levels are not necessary to maintain a livelihood in Alaska. One side benefit of establishing an income cap to the longevity bonus program is that federal rules regarding Supplemental Security Income (SSI) require recipients be held harmless from the impact of receipt of the longevity bonus payments; therefore the state pays about $2 million in general funds to the Adult Public Assistance Program as longevity bonus hold harmless money. If the income cap was established statutorily, the state would no longer have to pay. The Administration is estimating SB 54 will impact approximately six percent of current longevity bonus program recipients, and the state will save about $6 million annually. In implementing SB 54, income levels will be based on adjusted gross income as reported for federal tax purposes, minus longevity bonus payments. For those exceeding the limits, longevity bonus payments would be suspended for one year, so they can be reinstated if an applicant's income fluctuation was circumstantial. Number 156 SENATOR WARD asked if the proposal is to take the longevity bonus away from seniors with an income over $60,000. MS. ELGEE repeated the amount would be $60,000 for a single person, and $80,000 for a married couple. SENATOR WARD asked if this proposal changes the intent of the original program to a needs-based program. MS. ELGEE explained the longevity bonus program has undergone many changes since its inception. The original concept behind the program was to reward those individuals that resided in the State prior to Statehood. In 1984, as the result of a lawsuit, this program was opened up to any senior citizen with one year of residency. In 1994, legislation passed which created a phase-out of the program. Payment levels were reduced and the program was closed to new applicants as of Dec. 31, 1996. SENATOR WARD questioned at what point in the program it was decided certain people would be ineligible based on income. MS. ELGEE said the Governor is making that proposal with SB 54. She repeated the Governor is looking at ways to reduce state spending that will have the least impact on the public, and the primary need for the longevity bonus is amongst seniors who depend on it to pay living expenses. People at the income levels established in SB 54 do not require the longevity bonus payments to continue their residency in Alaska. Number 206 SENATOR WARD asked why the Governor would want to take money away from our pioneers. MS. ELGEE stated she believes that if there was plenty of money for all of the needs of the State, this proposal would not be submitted by the Governor, however that is not the case. Both the Administration and the Legislature have agreed on the need to control state spending. She repeated the Governor believes this is one way to achieve that goal with the least impact on the population affected. SENATOR WARD thought this proposal attacks those who least deserve to be attacked, of anyone. MS. ELGEE answered in making this proposal, the Governor did leave all other senior programs at current funding levels. The longevity bonus program proposal was a very conscious choice, in order to protect the other senior programs that serve more needy individuals. Number 224 SENATOR MACKEY stated SB 54 is part of the Governor's budget plan. If SB 54 does not pass, he will have an $8 million hole in his budget plan. Over the last six or seven years, the Legislature was confronted with the Court decisions. The program now serves any senior who has been a resident for one year, and about 20 percent of the recipients have been residents for less than five years. The cost of this program has risen about $7 to $11 million per year because of the number of new applicants. About three years ago the Legislature passed legislation to phase it out because there was no way the State could withstand the growth of the program at a time it was having to down-size. CHAIRMAN GREEN asked how seniors would prove their income and whether the amount would be based on income or assets. MS. ELGEE said income would be the only criteria, so people with assets, but no income from those assets, would not be penalized. Number 257 CHAIRMAN GREEN felt there are landowners with the potential for high earning power and noted she disagrees with that exemption. SENATOR MACKIE believed the Governor's reasoning is that many seniors with a limited fixed income critically need the longevity bonus program to make ends meet, but the policy question is should seniors making over $80,000 per year continue to receive payments when we cannot really call it a longevity bonus program any longer. SENATOR WARD agreed the program is not doing what it was originally designed to do, but questioned why seniors who have done well financially should be penalized. He commented there are many areas to cut the budget without attacking senior citizens, and believed SB 54 to be bad public policy. He stated he wholeheartedly disagrees with this policy, and that the Zobel case did not require seniors to submit tax reports to prove they are poor. Number 300 SENATOR MACKIE asked how seniors would prove their income and what fiscal impact that might have on DOA. MS. ELGEE explained there will be no additional administrative costs. The program has been operating on an honor system. When seniors leave the State, their payments are suspended while they are out-of-state; they are asked to notify DOA of their departure and return. DOA cross checks against permanent fund dividend eligibility to determine whether people are maintaining residency in the State. DOA intends to operate this aspect of the longevity bonus program in a similar manner. Recipients would be subject to audit, and if fraud was discovered, they would no longer be eligible for the program. SENATOR MACKIE asked if that process could be accomplished without additional employees. MS. ELGEE answered DOA has three employees who administer the longevity bonus program and works with OMB staff for auditing services, and plans to continue with that approach. Number 321 CHAIRMAN GREEN noted she received an inquiry about the message from the Governor, enclosed with longevity bonus checks, which alludes to the Governor's proposal for his 1998 capital budget monies for a senior citizens housing development program. That program will "...provide grants for buying land, site preparation, building materials, continuing maintenance of Pioneer Homes across Alaska, and completion of special care units in the Sitka and Palmer Pioneer Homes for the care of residents with Alzheimers Disease and related disorders." She stated her concern about the misuse of including messages with the payment, and asked about the omission of any reference to SB 54. She questioned whether seniors would be notified about SB 54 in the next mailing. MS. ELGEE commented DOA has done some public information work and published an article in the Senior Voice in December or January that outlined the proposal and the necessity for SB 54. She was unaware of whether the Governor intends to include a message about SB 54 in longevity bonus checks, but offered to pass the suggestion on to his staff. CHAIRMAN GREEN announced the State Affairs Committee would be holding a teleconference on SB 54 at 10:30 a.m. on Saturday and adjourned the meeting at 4:08 p.m.
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